Bill Clinton’s Secretary of Labor and current Obama economic advisor Robert Reich wrote a June 12th Op-Ed on Salon.com (here) defending a “public option” in the upcoming health reform bill.
I trust that Mr. Reich is an intelligent man, but that only makes his argument more bewildering.
His core proposition is that the solution to the financial train wreck of federal health entitlements, is to create a larger federal health entitlement.
“A public option large enough to have bargaining leverage …[is] the only way to prevent Medicare and Medicaid from eating up future federal budgets.”
In 2009, Medicare and Medicaid will spend $775 billion, over one third of total national health spending and 5.5% percent of GDP. If that massive “leverage” has been unable to control costs, what logic is there in asserting that an additional $150 billion per year will be able to?
He admits that “Medicare and Medicaid [will eat] up future federal budgets”, but then praises LBJ for “successfully take[ing] on the giant health care lobbies” to create those very programs.
Then he hopefully asks “The question now is how much LBJ is in Barack Obama.”
How can an intelligent man admit that LBJ’s health programs are a financial disaster, then hope our new President will replicate them?
There are only two possibilities. Either 1.) My assessment of Mr. Reich is wrong, and he is not smart enough to see the contradiction, or 2.) He does see the contradiction, but wants to expand government health care so badly that he is willing to ignore it, even at the cost of national bankruptcy.
LBJ’s legacy is a Medicare unfunded liability of $34 Trillion, or two and a half times the annual output of the entire U.S. economy. Mr. Reich thinks that’s a triumph and wants the program expanded.
I’m confidant that Mr. Reich does understand the economic cost of this policy, but not the full cost.
The hidden cost is having our grandchildren curse us for stealing their future.
